Asarco announces fourth quarter provisions.NEW YORK--(BUSINESS WIRE)--Jan. 22, 1996-- ASARCO ASARCO American Smelting and Refining Company Incorporated (NYSE NYSE See: New York Stock Exchange :AR) today announced that it will take a $79.5 million after-tax charge, $122.3 million on a pre-tax basis, in its fourth quarter 1995 results. The charge includes a $34.3 million after-tax provision for termination of lead refining operations at its Omaha, Nebraska plant, $22.7 million after-tax for the effects of adoption of a new accounting principle, and $22.5 million after-tax for additions to its reserve for costs associated with previously closed operations. The Company has decided not to make the substantial $40 million investment which would be required to meet state and U.S. EPA EPA eicosapentaenoic acid. EPA abbr. eicosapentaenoic acid EPA, n.pr See acid, eicosapentaenoic. EPA, n. imposed environmental requirements at its Omaha plant. As a result, the Company expects to cease lead refining operations by January 1, 1997. The Company's 1995 results will include the writedown of the remaining book value of its Omaha plant, and a provision of $34.3 million after-tax or $52.8 million on a pre-tax basis to cover severance and legal expenses as well as expected cleanup and demolition costs associated with the termination of lead refining operations. The charge also includes the writedown of certain in-process inventory to net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. . The Omaha plant has been operated by Asarco since the Company was formed in 1899. The plant refines lead bullion which is produced by the Company's East Helena, Montana East Helena is a city in Lewis and Clark County, Montana, about five miles east of Helena, Montana. The population was 1,642 at the 2000 census. Geography East Helena is located at (46.589856, -111. smelter from purchased concentrates. Since 1990, the Omaha plant has operated at a loss. With the termination of lead refining activities at Omaha, the Company will either sell the bullion produced by East Helena, or will contract with a third party for refining the bullion on a toll basis. The Company has elected early adoption of a new accounting principle, Statement on Financial Accounting Standards No. 121 Accounting for the Impairment of Long-Lived Assets ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 121") in the fourth quarter 1995. Coincident with the adoption of the new accounting principle, the Company will record a $22.7 million after-tax charge or $34.9 million on a pre-tax basis principally related to the writedown of the book value of the Company's Omaha lead refinery. The Company also will take a $22.5 million after-tax provision, $34.6 million on a pre-tax basis, to cover increased costs incurred at previously closed facilities in connection with litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and ongoing remediation activities. Richard de J. Osborne, Chairman of Asarco, said that on an operating basis, Asarco's fourth quarter and full year 1995 results will be very strong. Results for the fourth quarter including the special charges are expected to be a net loss, however, fourth quarter earnings from operations are expected to exceed any previous quarter in 1995 despite somewhat lower metal prices. The Company expects to report fourth quarter 1995 earnings on January 31, 1996. ASARCO Incorporated, headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , is one of the world's leading integrated producers of nonferrous metals, principally copper, lead, zinc, silver, molybdenum molybdenum (məlĭb`dənəm) [Gr.,=leadlike], metallic chemical element; symbol Mo; at. no. 42; at. wt. 95.94; m.p. about 2,617°C;; b.p. about 4,612°C;; sp. gr. 10.22 at 20°C;; valence +2, +3, +4, +5, or +6. and gold. Asarco also produces specialty chemicals and aggregates. Asarco had 1994 sales of $2.0 billion. CONTACT: ASARCO Incorporated Jerry Cooper, Corporate Communiations, 212/510-1810 |
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